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Gard Guidance Masters GENERAL AVERAGE

The Master should understand that a general average in terms of the York-Antwerp Rules arises only when:
“Extraordinary sacrifice or expenditure is intentionally or reasonably made or incurred for the common safety for the purpose of preserving from the peril the property involved in a common maritime adventure.”
(York-Antwerp Rules 2004 Rule A).

Examples of events giving rise to a general average declaration could be

  • fire on board
  • grounding
  • major collapse of cargo
  • jettison of cargo
  • main engine breakdown
  • loss of rudder or propeller
  • serious structural failure.

    These incidents may result in extraordinary sacrifices, such as

  • flooding a full cargo hold to confine a fire
  • jettisoning deck cargo to regain stability.

    It may be necessary to

  • request a salvage tug to attend to salve the vessel or to keep her away from the shoreline<
  • have the vessel towed into a port of refuge.

    The parties who contribute in general average are the parties with an owning interest and usually an insurable interest in the adventure: the owners at risk for the vessel, cargo, bunkers and freight.

    An incident leading to general average affects in all instances the Hull and Machinery insurer as well as the cargo insurer. Such an incident may often include elements such as pollution, threat of pollution, personal injury or other risks falling under the P&I insurance. Accordingly, the P&I insurer or its correspondent should be contacted without delay in order to assess the situation. A surveyor needs to be appointed for the Hull and Machinery insurer to investigate the cause and extent of the accident and a general average surveyor will frequently be appointed on behalf of all the interested parties. In addition, a surveyor for the P&I aspects of the incident may have to be appointed to investigate the extent of their involvement. The Company will, in co-operation with its Hull and Machinery insurer and the appointed general average adjuster, take the steps necessary to obtain a general average bond or guarantee and a non-separation agreement if required, prior to the discharge of the cargo and consider any further steps to secure the interests in general average. Cargo interests often try to deny their legal obligation to contribute their share in general average based on allegations of unseaworthiness and breach of contract of affreightment.

    The Company and the P&I insurer may also be liable for the costs of the measures undertaken to prevent or minimise damage to the environment as such costs are only allowed in general average in certain circumstances.

    Due to the complex nature of general average and the mechanism for the allocation of expenses, the Master is best advised to keep a detailed chronological record of all actions taken, so that the Company and the P&I insurer can justify their position to the various interests contributing in the general average.

    For further information on general average please refer to section 3.9 Grounding and salvage – General average.